India’s long delay, latest foreign trade policy has finally been unveiled. The new policy announced by Union Minister of Commerce, Industry and Textiles Piyush Goyal on Friday has set an ambitious target of reaching $2 trillion in total exports (combining goods and services) by 2030. The government is currently estimating exports. The policy forecasts outbound shipments of goods and services to nearly triple over the course of seven years, to cross $760 billion in the fiscal year ending March 31. And when one compares this growth target with the 75% expansion achieved in the last seven years since 2016, the magnitude of the aspiration suggests the vault’s ambition. To be sure, the past three years have been unprecedented, with first the COVID-19 pandemic and then Russia’s invasion of Ukraine disrupting global business momentum. Nevertheless, the past three years, when India suspended its trade policy, provided a unique opportunity for policy makers to redefine the contours of their trade policy goals. The end result is long on statements of intent. The National Trade Facilitation Action Plan, for example, lists aims to achieve goals that are necessary and laudable but by no means novel: in ease of doing business through reduction in transaction costs and times. reforms, reduction in cargo release time, and a paperless regulatory environment.
Towards India’s WTO obligations, the transition from incentives to an enabling regime of duty exemption and rebate schemes to facilitate duty free import of inputs required to boost exports is almost complete. Most of these schemes including RoDTEP (Remission of Duties and Taxes on Exported Products), RoSCTL (Remission of State and Central Taxes and Duties), AA (Advance Authorization) and EPCG (Export Promotion Capital Goods) are in place for some time and adoption The policy has recently changed some of the implementation conditions to improve efficiency. For example, in the core sector of apparel and clothing, the facility of self-declaration has now been offered to all exporters. A one-time waiver has also been offered, giving exporters more time to avail benefits of both the AA and EPCG schemes. And acknowledging the substantial boom in online trade, the policy devotes an entire chapter to ‘promoting cross-border trade in a digital economy’, which also includes facilitating the setting up of dedicated e-commerce export hubs. Nevertheless, global trade has largely calmed down and the services sector continues to face headwinds of uncertainty in key western markets, with more concrete and regionally targeted measures to meet FTP 2030 export targets, as well as a lags behind in offering a well-defined road map.